It’s nothing new for vendors to find ways to lock in customers to their products and cloud services. Oracle recently announced it will no longer support multi-tenancy in cloud deployments outside its own ecosystem—despite this still being listed in its official documentation. While this move is clearly intended to drive customers toward Oracle Cloud, it may instead push them away from Oracle entirely.

A bit of history

This isn’t a new pattern, Oracle has a long history of licensing changes that prioritize sales over customer needs, frustrating many who calculate core licensing outside of OCI. Vendors often become insulated, seeing only the intended benefits of such changes while missing the broader market impact.

According to this secondary licensing document outlining the limitation, Table 1-2 Consolidation explicitly states that for “Authorized Cloud Environments: Use is limited to three pluggable databases per container database.” Since each Container Database (CDB) carries most background processes for easier management and resource efficiency, this restriction will increase cloud costs for organizations running Oracle on non-OCI infrastructure.

With virtual machines already capped at 64 vCPUs, adding unnecessary memory overhead for CDBs with resources that could be allocated to pluggable databases (PDBs) makes this change even harder to justify.

They are not alone

To be fair, Oracle isn’t alone in this approach. Microsoft has made similar moves, particularly with SQL Server CPU licensing models, which, like Oracle’s policies, often push customers toward open-source alternatives like PostgreSQL or MySQL. In fact, restrictive licensing and deployment limitations have been a key driver in PostgreSQL’s rising popularity. If Oracle and Microsoft wonder why enterprises are shifting to open-source databases, they need only look at their own policies.

The path forward?

So, what can vendors do to foster a stronger community and drive adoption? Traditionally, enterprise solutions relied on vendor investment to secure customer commitment. But the market has shifted – organizations now allocate more budget to cloud infrastructure rather than proprietary software licenses, including relational databases. If vendors want greater customer investment in their products, artificial constraints on deployment locations won’t work, incentives will.

Microsoft seems to recognize this with SQL Server 2025, integrating it deeply into Fabric’s analytics and AI ecosystem. This strategic move keeps customers within the SQL Server ecosystem while aligning with broader cloud-native and AI-driven workloads. Microsoft is also expanding support for connectors to external data sources, ensuring Fabric has access to more data.

Oracle appears to be taking similar steps with Oracle Analytics Cloud and AI services, but its user base skews older than Microsoft’s, presenting a unique challenge. At a recent Oracle conference, many AI-focused sessions struggled to gain traction, likely because they don’t yet align with the priorities of Oracle’s traditionally risk-averse, mission-critical user base.

If vendors want to retain and grow their communities, they must adapt to how organizations invest today. Locking down deployment options isn’t a strategy for long-term success, building compelling ecosystems that provide real value is.